Can XRP (Ripple) Make You a Millionaire? Here's What You Need to Know!

Bitcoin has recently experienced a sharp decline in price, falling nearly 10% from January 7 to January 14. Altcoins like Ethereum, Solana, and Dogecoin mirrored this drop. The decline was influenced by a hotter-than-expected jobs report, indicating that the Federal Reserve might delay or reduce interest rate cuts. As digital assets are considered "risk-on" investments, the expected fewer cuts led to a significant impact on cryptocurrencies.

Despite the downward trend in the market, XRP managed to gain 3.7% during the same period. Let's explore the reasons behind this and whether XRP could potentially make you a millionaire.

A Key Deadline Looms

In 2020, Ripple, the parent company of XRP, faced a lawsuit from the Securities and Exchange Commission (SEC), claiming that XRP was sold as an unregistered security. Recently, a court ruled mostly in favor of Ripple, approving a $125 million fine instead of the $2 billion initially sought by the SEC. However, the SEC has appealed this ruling, with a crucial deadline approaching today.

There is speculation that the SEC may not pursue its appeal due to a change in leadership with the election of Donald Trump, as the current chair, Gary Gensler, is stepping down. The new chair, Pail Atkins, may adopt a different approach towards XRP and crypto in general.

XRP Has a Valuation Problem

While a favorable ruling from the SEC could lead to a short-term gain for XRP, its long-term value remains questionable. The market capitalization of XRP, currently around $150 billion, seems disconnected from its actual potential. XRP aims to revolutionize banking by drastically reducing transaction costs and increasing speed, yet even if it captured the entire market, the fees collected would still be significantly lower than the $193 billion currently paid to legacy systems.

The Question at Hand

Could XRP reach millionaire-maker status? To turn a $10,000 investment into $1 million in 30 years, it would need to achieve a 33,000% return, translating to an annual growth rate of 21.3%—more than double the historical average of the stock market. If XRP were to grow at this rate, its market cap by 2065 would be a staggering $48 trillion, equivalent to the combined market cap of the ten largest banks.

Given these considerations, I would not classify XRP as a millionaire maker. The current valuation raises concerns, and as such, I wouldn’t recommend it as an investment at this time. For those interested in crypto, Bitcoin may be a more prudent choice.